Groupon Inc (NASDAQ: GRPN)
Groupon is having an incredible day in the market today, and for good reason. The company has blown away expectations with regard to the fourth quarter of 2015. After reporting earnings after hours yesterday, we’ve seen steady gains on the stock. Today, we’ll talk about what we saw from the earnings report, how the market reacted to the news, and what we can expect to see from GRPN Moving forward. So, let’s get right to it…
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GRPN Blows Away Earnings Expectations
As mentioned above, Groupon reported its earnings for the fourth quarter of 2015 after the closing bell yesterday as expected. However, the results reported were far from what was expected. Here’s what we saw from the earnings report:
- Earnings Per Share – In terms of earnings per share, GRPN did incredibly well. While analysts had expected the company to post absolutely $0 in earnings per share, the company posted earnings for the quarter at $0.04, showing year over year growth of 33.3%.
- Revenue – As if earnings wasn’t enough to excite investors, GRPN also blew away expectations with regard to revenue. In terms of top-line revenue, analysts were expecting GRPN to generate $841 million. The company actually reported revenue for the fourth quarter in the amount of $917.2 million. This is solid year-over-year growth from the $750.36 million posted in the same quarter last year.
- Active Deals – Groupon also reported great news with regard to active deals on their website. On average, the company is displaying around 350,000 active deals in North America and about 650,000 active deals globally. This includes about 70,000 coupons.
How Investors Reacted To The News
As investors, we know that there are few factors that have the ability to cause movement in the market quite like earnings, and considering the incredibly positive results from GRPN, we’re definitely seeing movement. Currently (10:35), GRPN is trading at $2.81 per share after a gain of $0.57 per share or 25.45% so far today.
What We Can Expect To See Moving Forward
Moving forward, I’m expecting to see overwhelmingly positive movement from Groupon. While this does have something to do with earnings, earnings really aren’t the entire story here. In my opinion, GRPN has created a business model that’s somewhat recession proof and will likely continue to grow regardless of economic conditions. The reality is that everyone likes to save money, and the GRPN business model allows them to do that. While in tough economic times, consumers may spend less money, they are more likely to look for deals and coupons. So, even in poor economic conditions, Groupon is likely to see incredibly strong sales. That, combined with the fact that the company has a proven history of producing solid earnings, even when analysts expect different outcomes, means that we’re looking at a great stock here. All in all, I’m expecting to see further upward movement!
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What Do You Think?
Where do you think GRPN is headed moving forward? Let us know your opinion in the comments below!